SBI 5-Year FD vs SCSS: What will be your quarterly income on Rs 10,00,000 investment in each?
SBI 5-Year FD and SCSS are popular fixed-income investment options. While SBI FD offers flexibility and tax benefits, SCSS provides higher returns and quarterly payouts.
Fixed Deposits (FD) and the Senior Citizens Savings Scheme (SCSS) are secure investment options offering fixed returns. SBI’s 5-Year FD provides stable interest rates with tax benefits under Section 80C, whereas SCSS, designed for senior citizens, offers a higher interest rate with quarterly payouts. While SBI FD is open to all, SCSS is exclusive to retirees and individuals above 60 years. This article compares both options, helping investors understand potential earnings on a Rs 10 lakh investment over five years.
Overview: SBI 5-Year FD vs SCSS
Both SBI Fixed Deposit (FD) and the Senior Citizens Savings Scheme (SCSS) offer safe investment options. While SBI FD is available to all investors, SCSS is exclusively for senior citizens.
Interest Rates Comparison
- SBI 5-Year FD: 6.50% p.a. (general) | 7.50% p.a. (senior citizens)
- SCSS: 8.20% p.a.
Quarterly Income Calculation: SBI 5-Year FD
- Investment: Rs 10,00,000
- Maturity Amount: Rs 13,25,000
- Total Interest Earned: Rs 3,25,000
- Quarterly Interest: Rs 16,250
Quarterly Income Calculation: SCSS
- Investment: Rs 10,00,000
- Maturity Amount: Rs 14,10,000
- Total Interest Earned in 5 Years: Rs 4,10,000
- Quarterly Interest: Rs 20,500
Eligibility Criteria
- SBI FD: Open to all individuals, NRIs, and senior citizens.
- SCSS: Available only to individuals above 60 years or retirees from government/defense sectors meeting specific age conditions.
Tax Benefits
- SBI 5-Year FD: Qualifies for tax deduction under Section 80C of the Income Tax Act, but interest is taxable.
- SCSS: Also qualifies under Section 80C, but interest above Rs 50,000 per annum is subject to TDS.
Liquidity & Premature Withdrawal
- SBI FD: Allows premature withdrawal with a penalty.
- SCSS: Withdrawal before 1 year results in no interest; partial deductions apply for early closures before 5 years.
Investment Limits
- SBI FD: No upper limit, with a minimum deposit requirement as per bank policy.
- SCSS: Maximum deposit capped at Rs 30 lakh, with a minimum of Rs 1,000.
Extension & Renewal
- SBI FD: Can be renewed for another term upon maturity.
- SCSS: Can be extended once for 3 more years post maturity.
SBI 5-Year FD vs SCSS
- For higher returns: SCSS offers a higher interest rate and quarterly income.
- For flexibility: SBI FD is available to all and offers multiple tenure options.